With $6.7 million in fees for Banks and advisers Saudi Arabia’s National Commercial Bank (NCB) set to be the world’s second-largest share sale this year with $6 billion initial public offering. Its about 0.1% of the 22.5 billion riyal offering. HSBC Holdings Plc (HSBA) and Gulf International Bank Bsc are financial advisers to the lender and it will share fee with eight other banks, three accountancy firms, and a media agency.
The Chinese e-commerce company was provided with $300 million as fee for being adviser of Alibaba Group Holding Ltd. (BABA) for it's IPO and it last month raised $25 billion in this year’s biggest offering. Credit Suisse Group AG and Morgan Stanley took about 1.2 percent of proceeds.
Asim Bukhtiar, vice president and head of research at Riyad Capital, said that the fee percentage was low and further added that HSBC and Gulf International will each earn between $1 million and $1.5 million for their work on the NCB deal.
He added, “It seems like prestige overtook fee consideration as this single transaction will catapult both banks to the top of the league tables.”
There is no response from Gulf International Bank and HSBC's spokesman has declined to comment.
Lower Fees
NCB has been paid lower fee than HSBC and Morgan Stanley on the $1.58 billion Emaar Malls Group PJSC (EMAARMLS) IPO in September. NCB received 130 million dirhams ($35 million) as underwriting fees and other expenses related to that offering.
The NCB offering will run until Nov 2. During that time the bank will sell 500 million shares at 45 riyals each, according to a statement on the Saudi Stock Exchange’s website earlier this month. Only Saudi investors can subscribe those offerings and 300 million shares is allocated to individuals and remaining share is allocated to kingdom’s Public Pension Agency.
Surpassing the $5 billion raised by Dubai’s DP World Ltd. in 2007,the deal will be the Middle East’s largest.
NCB is not listed yet but still it's most profitable bank in Saudi Arab.
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